Progress Software (PRGS) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached $237 million, up 36% year-over-year, with ARR growing 46% to $838 million and net retention rate at 100%.

• ShareFile integration is ahead of schedule, contributing over $250 million to ARR and driving SaaS revenue up over 1,100%.

• Non-GAAP EPS was $1.40, exceeding guidance; GAAP net income for the quarter was $17.0 million, up 5% year-over-year.

• Acquired Nuclia for $20 million to enhance GenAI and RAG AI capabilities, with plans to integrate its technology across the product portfolio.

• Ongoing MOVEit Vulnerability litigation and integration risks from acquisitions remain key uncertainties.

Financial highlights

• Q2 2025 revenue was $237–$237.4 million, up 36% year-over-year; ARR reached $838 million, up 46%.

• Non-GAAP operating margin was 40%; GAAP operating margin was 16%.

• Non-GAAP EPS was $1.40; GAAP EPS was $0.39.

• Unlevered free cash flow was $52 million; cash and equivalents at $102 million; net debt at $1.37 billion.

• Days sales outstanding increased to 53 days, mainly due to ShareFile billing transition.

Outlook and guidance

• Q3 2025 revenue guidance: $237–$243 million; non-GAAP EPS: $1.28–$1.34.

• FY25 revenue guidance raised to $962–$974 million; non-GAAP EPS to $5.28–$5.40; operating margin expected at 38–39%.

• FY25 unlevered free cash flow projected at $285–$296 million; cash from operations expected at $218–$230 million.

• Nuclia acquisition not expected to materially impact 2025 financials.

• Currency translation expected to have a $2.4 million positive impact on FY25 revenue.